-Jun Retail Sales +0.1% m/m; +1.6% y/y; median +1.1% m/m; +2.4% y/y
-Jun Retail Sales ex fuel +0.3% m/m; 2.2% y/y; median +1% m/m; +2.4% y/y

LONDON (MNI) – Headline retail sales were virtually unchanged on
the month in June, dampened by poor barbecue food sales as the UK saw
the wettest June since 1910, figures released from National Statistics
showed Thursday.

Strip out the poor weather and sales would have risen during the
month, as non-food sales rose firmly. While this points to underlying
sales being stronger than the headline data suggest other factors make
gauging the sector’s underlying strength difficult, with the fall
in volumes over the quarter the largest for two years.

National Statistics said there was no evidence that the Jubilee had
any significant impact on sales and it was “clutching at straws” to try
and find any sign of a postive impact in the data. The previous Jubilee,
the Golden Jubilee in 2002, also had no discernible upward effect on
sales.

Retail sales volumes rose 0.1% on the month in June and were up
1.6% on the year, below the median forecast for increases of 0.5% and
2.3% respectively. Retail sales ex auto fuel retail sales were up 0.3%
on the month and by 2.2% on the year

Sales at predominantly food stores fell 0.7% on the month, with
National Statistics reporting that retailers had said that the poor
weather had hit sales of barbecue food items. This tallies with the
Consumer Prices data which showed meat prices having a significant down
impact on overall inflation in June.

Without a fall in food then sales overall sales would have risen,
as non-food sales rose 1.2% on the month, with all categories posting
increases on the month.

Part of this non-food strength, however, may prove to be a one-off
and reversed next month as evidence suggests retailers brought forward
their usual summer sales from July. The price deflator ex fuel fell to
0.6% from 1.3%, the lowest since November 2009.

Notable, clothing and footwear sales rose 2.5% on the month, with
the price deflator in this sector turning negative for the first time
since August 2010, declining to -0.3% from 1.7% in May.

Sales at other stores rose a healthy 1.4% while non-specialised
sales and household goods store sales were up 0.2% and 0.3%
respectively.

The trend in sales remains weak, with sales in Q2 down 0.7% on the
quarter compared with Q1, the weakest three monthly growth since March
2010. This will pull down GDP growth over the quarter.

-London bureau: +44 20 7862 7491; email: puglow@marketnews.com

[TOPICS: MT$$$$,M$B$$$,MABDS$]